Now they have killed the public option
Democratic leaders have been busy patting themselves on the back this morning following the tentative deal struck last night between liberal and conservative Democrats over how to approach the public option. Details remain purposefully thin while the Congressional Budget Office crunches the cost estimate, but the various elements of the plan that have been reported leave plenty of reason to think the proposal has a tough road ahead.
1) The deal not really a deal, but simply an agreement to send a blueprint to the CBO. Even some members of the “gang of 10″ that negotiated the proposal are already voicing their discontent.
2) The strategy reportedly eliminates an immediate public option, instead creating a trigger that would launch a public plan if private companies don’t meet certain cost and coverage benchmarks. That could lure the support of Sen. Olympia Snowe (R-Maine), but liberal Sens. Bernie Sanders (I-Vt.) and Roland Burris (D-Ill.) have hinged their backing for the overall bill on the inclusion of a strong and immediate public option. And Sen. Joe Lieberman (I-Conn.) has said in no uncertain terms that he’ll filibuster a bill that contains such a trigger.
3) The strategy reportedly keeps the plan’s administrative responsibilities in the hands of private companies. It’s unclear what this means, exactly, but if the companies will be tasked with screening claims, they have every incentive to deny needed services for the sake of generating profits and rewarding shareholders. Indeed, fixing that problem was one of the central reasons to reform the health care system to begin with.
4) The strategy reportedly would force insurers to spend at least 90 cents of every premium dollar on health care services — as opposed to administration, marketing and salaries. That’s sure to be attacked by the powerful insurance lobby, not to mention conservative lawmakers who don’t want the government dictating the business practices of private companies. Indeed, a similar proposal was shot down withdrawn in the Senate Finance Committee earlier in the year.
5) The plan reportedly would expand Medicare to allow folks aged 55 to 64 to buy in. Again, it’s unclear how patient cost-sharing and provider reimbursements would be structured, but if reimbursement mirrors that of the current Medicare program, it could lead to care access issues for those patients. Doctors have long complained that Medicare reimbursement is too low, and many providers don’t see Medicare patients at all.
For all these reasons, Democrats were smart to withhold the details of their plan, which allows them to tweak it as is necessary to keep costs down. For now, though, the ball is in CBO’s court.
AmSpecBlog
AP: Dems Drop “Public Option” As Part of Health Care Deal
The Associated Press is
reporting that Senate Democrats have reached a tentative deal
that would drop the so-called public option.
Although they have not yet announced details, reports in recent
days have centered on a pact that would have the entity that runs
the federal employee health care system oversee the creation of
privately administered non-profit plans that would be offered on
the new government exchanges. In return for giving up the
public option, liberals would be rewarded with a plan to expand
Medicare to those age 55 and over, and to expand Medicaid
eligibility to 150 percent of the federal poverty level.
The new proposal would have to be evaluated by the Congressional
Budget Office.
UPDATE: Brian Beutler
reports that the deal still leaves open the possibility of a
“triggered” public option, and that the Medicare expansion would
be begin in 2011. While there would be no subsidies for the first
three years, after 2014, Medicare would be offered on the
exchanges to those over 55, who would be able to use the
subsidies already created by the bill to pay for it. And,
according to Beutler, Medicaid would not be expanded to 150
percent of the federal poverty level.
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WASHINGTON - President Barack Obama on Wednesday praised a Senate health care compromise that would jettison a full-blown government insurance plan in favor of expanding Medicare and creating new private plans modeled on the federal employee program.
“The Senate made critical progress last night with a creative framework that I believe will pave the way for final passage and a historic achievement on behalf of the American people,” Obama said at an event near the White House to announce spending for community health centers and other initiatives.
“I support this effort, especially since it's aimed at increasing choice and competition and lowering costs,” the president said. He spoke with the Senate at a critical juncture in the second week of debate on a sweeping health overhaul bill. Majority Leader Harry Reid, D-Nev., is hoping that the deal announced Tuesday night can hold together a fragile 60-vote coalition and clear the way for passage of the legislation before Christmas.
There were some positive signs Wednesday. A much-courted moderate — Connecticut independent Sen. Joe Lieberman — signaled he might be able to live with the compromise, and liberal Democrats also spoke out in favor of the idea.
“I am encouraged by the progress toward a consensus,” Lieberman said in a statement that also underscored his opposition to any new government insurance plan that would compete with private carriers.
Meanwhile, former presidential candidate and one-time Vermont Gov. Howard Dean said the Medicare option for people age 55 to 64 was “a positive step forward.”
Dean, a physician, has been one of the most vocal supporters of the idea that the government should get into the health insurance market. But as it became increasingly clear in recent weeks that a new government insurance plan did not command the necessary votes in the Senate, Dean contacted Reid and Sen. Charles Schumer, D-N.Y., to offer the Medicare expansion as a way forward.
“Using Medicare makes more sense than reinventing more bureaucracy,” Dean said Wednesday on CBS' “The Early Show.”
Rep. Anthony Weiner, a vocal New York liberal who has strongly supported a public insurance option, issued a statement calling the Medicare expansion “one idea I like a lot.”
However, as the Senate continued to debate, the American Hospital Association and the American Medical Association — both groups that have been generally supportive of Congress' health overhaul efforts thus far — raised red flags. Both groups are concerned about adding more patients to Medicare, because the program pays providers significantly lower rates than private insurers do.
“The AMA has long-standing policy opposing the expansion of Medicare given the fiscal projections for the future,” said the group's president, Dr. James Rohack. “We believe a health insurance exchange without an expansion of Medicare will provide more affordable choices and better access to care for Americans ages 55-64.”
A powerful small business group also swung into opposition. The National Federation of Independent Business, which was instrumental in defeating then-President Bill Clinton's health care bill in the 1990s, said the Democratic bill would raise costs and make it harder to create jobs.
Nonetheless Reid, D-Nev., was upbeat.
“We've overcome a real problem that we had,” Reid said in announcing what he called a “broad agreement” Tuesday night.
Officials said it included nonprofit national health plans administered by the Office of Personnel Management, which runs the popular federal employees' health plan, as well as the idea of opening Medicare to uninsured Americans beginning at age 55, effective in 2011.
Greater government involvement could kick in if private insurance companies declined to participate in the nationwide plan. If they didn't, one possibility was for the personnel office to set up a government-run plan, either national in scope or on a state-by-state basis.
Reid planned to describe the plan in greater detail after getting a cost analysis from the Congressional Budget Office. The compromise was negotiated over the past days by five moderate and five liberal Democrats.
The Senate's 10-year, nearly $1 trillion legislation would dramatically remake the U.S. health care system and extend coverage to millions of the uninsured, with a new requirement for nearly everyone to purchase insurance. New purchasing marketplaces called exchanges would make it easier for small businesses and people without government or employer coverage to shop for health insurance, and unpopular insurance company practices such as denying coverage to people with pre-existing medical conditions would be banned.
The deal reached Tuesday would put even more requirements on insurers by requiring that 90 percent of premium dollars be spent on medical benefits, as opposed to administrative costs, officials said. The officials who described the details of the closed-door negotiations did so on condition of anonymity, saying they were not authorized to discuss them publicly.
More challenges lie ahead. On Wednesday, senators began debating an amendment by Sen. Byron Dorgan, D-N.D., to legalize the importation of prescription drugs from Canada and several other countries as a way of holding down consumer costs. The idea enjoys widespread support but is opposed by the pharmaceutical industry, which has worked closely with the administration on health care and has spent millions of dollars on television advertisements in support of legislation.
The Food and Drug Administration issued a letter saying it would be “logistically challenging” to assure the safety of imported drugs, raising concerns without stating outright opposition.
Half a day later, we know a lot more about where the key players who will determine the fate of health care reform stand on a burgeoning public option compromise. Unfortunately, there's still a substantial lack of clarity about where we go from here.
The long and short of it is this: It is possible that Democrats will reach a consensus on a plan to trade the public option for several concessions, including a plan, supported by progressives, to allow people age 55-64 to buy into Medicare. That could be the grand bargain that allows health care to pass the Senate. But not a single Republican–including Sen. Olympia Snowe (R-ME)–seems to support the ideas on offer. And with Democrats unable to lose a single vote, one of them–Sen. Ben Nelson (D-NE)–could defect over the issue of abortion.
As I reported this afternoon, Snowe (R-ME) says she's not a fan of the ideas coming out of series of meetings between Democrats seeking accord on the public option. Snowe didn't explicitly say she'd filibuster the health care bill if that compromise emerges, but she has told Senate Majority Leader Harry Reid she doesn't support the idea.
That makes it seem quite likely that Reid needs all 60 of his members to support whatever compromise comes out of the negotiations. Sen. Joe Lieberman (I-CT) made no promises, but seemed open to the trade-off on the table. Optimistically, that makes 59.
That leaves Nelson. Nelson is threatening to filibuster over a different issue: abortion. He wants the health care bill to prevent the millions of people who would be receiving federal insurance subsidies from buying policies that cover abortion. His amendment, codifying that idea, is not expected to pass.
Reid says he's happy to continue negotiating with Nelson if his abortion measure goes down in smoke. And perhaps Nelson will take a second crack at a compromise, or will relent on his filibuster threat. But we likely won't know until after his amendment goes down.
At his weekly press conference today, I asked Reid what his next move is if Nelson defects. Reid suggested more compromise is the only option. “The purpose of legislation is to build consensus,” Reid said. “It's not often that you have a piece of legislation that is perfect. But we can not let the perfect be the enemy of the good.”
Sen. Jay Rockefeller (D-WV) was a bit more dramatic “I'm unafraid of everything, and afraid of everything. I'm exactly where I should be…. we have no votes to lose.”
The tax wouldn't apply to surgery intended to correct deformities resulting from disease or injury, so the aim would be to generate revenue from the purely elective procedures. As a luxury tax, it's unlikely to face much opposition. The American Society of Plastic Surgeons, however, sees hidden problems that it says will lead to unintended consequences.
Also, since 86% of cosmetic surgery patients are women, some critics are raising bias accusations. Jill Filipovic, a 26-year-old lawyer and blogger, told USA Today that women are under much more pressure than men to look younger: “It's an easy choice for senators who are overwhelmingly male to tax something they probably aren't going to use.”
Additionally, the excise tax wouldn't be as targeted as many believe. Plenty of lower-cost cosmetic procedures are available, which has made the services much more accessible to the middle class. Dr. Ali Vafa, who runs New York Medical Aesthetics, a nonsurgical cosmetic medical practice in Manhattan, says some treatments cost as little as $250, which opens the industry to a far larger constituency than just the high-net-worth set. In fact, the American Society of Plastic Surgeons says 60% of female patients buying cosmetic surgery have annual incomes of $30,000 to $90,000.
Liposuction Abroad?
In some cases, the tax could become difficult to enforce because the line that separates exempt and taxable procedures may be vague. USA Today reports that according to Dr. Phil Haeck, a nose operation that clears an airway wouldn't be taxed, but throwing in a nose straightening could change the situation. If a tax official were to examine the transaction, there's no guarantee as to how it would be interpreted.
And there's the risk that an excise tax on cosmetic surgery would boost medical tourism because wealthier patients — those targeted by the bill — might dash off to foreign countries to beat the tax. In the wake of a 6% cosmetic surgery tax in New Jersey five years ago, patients set out for New York and Pennsylvania instead. A federal measure could push medical consumers to foreign, and higher-risk, markets such as Thailand, Mexico and Costa Rica.
Vafa, whose practice has been growing robustly this year, indicates that the business risks associated with a tax on cosmetic surgery are palpable. “It would affect us,” he confirms, saying, “We would have to raise our prices, and people seem to be very conscious about prices as it is.” Patients are shopping around, he says, “which they didn't do as much before the recession.”
Little Sympathy
Unfortunately for the cosmetic surgeons, their concerns aren't likely to resonate with large portions of the American public. Cosmetic surgery is still seen as a luxury few can afford, especially with high unemployment so prevalent. Those who can shell out the cash for these procedures, of course, probably won't win much sympathy.
So, it isn't surprising that Tom Ochsenschlager, vice president of taxation for the American Institute of Certified Public Accountants, thinks this provision will survive the debate. The senators generally haven't shown any opposition to it, and the real fight will probably remain centered on government-funded insurance alternatives.
A look at key issues in the health care debate:
THE ISSUE: Would restrictions on medical malpractice lawsuits mean cheaper health insurance?
THE POLITICS: Republicans rally around the idea that the health system would save substantial money if limits were placed on frivolous lawsuits by patients or their families, and on the size of awards paid out when medical mistakes are made. Some in the GOP see "tort reform" as a magic bullet for runaway costs and have been pushing it for years. The proposal never goes far with most Democrats, who call it a red herring. This contest of ideas has as much to do with special interest groups as with the two parties. Trial lawyers, who oppose proposed limits on the suits, are heavily connected with Democrats in their political contributions. Traditionally, doctors have given more to Republicans. Their leading trade group, the American Medical Association, counts controls on medical liability as a priority. President Barack Obama opposes what he calls "an artificial cap" on malpractice awards.
WHAT IT MEANS: Lawsuits — or the threat of them — can drive up health care costs in several ways, but it's questionable by how much. Most directly, malpractice insurance is expensive for medical professionals, and it can cost upwards of $100,000 to bring a case to court. Still, the nonpartisan Congressional Budget Office estimated last year that savings achieved by limiting medical liability would amount to less than 0.5 percent of health care spending. In addition, the office studied states with their own controls on medical lawsuits. It found no proof that those limits have reduced "defensive medicine" — expensive and unnecessary tests and procedures ordered by a doctor only to reduce the risk of a lawsuit.
On Afghanistan, the cable anchor rendered his verdict: "C. Took him far too long to make a decision. That helped the Taliban and it rattled Pakistan. All right? Pakistan is scared. They don't know what the USA is go to do so Pakistan isn't going to invest in their army and their blood unless they know we're growing to be in that region." On the jobs front, he was kinder, giving the President a B, saying that Obama "stabilized" the economy.
However O’Reilly was a much tougher grader than ABC’s George Stephanopoulos, rumored to be the next co-host of GMA. During the 2008 presidential election, Stephanopoulos went four-for-four, declaring Obama or Joe Biden the "report card winner" in every debate.
A transcript of the December 7 segment, which aired at 7:12, follows:
7am tease
DIANE SAWYER: Rallying cry. The President makes a rare visit to the Capitol, pitching senators on health care reform, all as he’s set to unveil a new jobs plan. Bill O’Reilly is here with a presidential report card.
7:12
ROBIN ROBERTS: As we told you earlier, this will be a critical two weeks for President Obama as he makes a big push on two critical issues, health care and jobs. And of course, just last week, he announced a new policy concerning Afghanistan. The President dealing in a major way with three major issues at the same time. We're going to get a presidential report card now from Bill O'Reilly, the New York Times best-seller on the list for 49 weeks with his Bold Fresh Piece of Humanity. And, of course, he’s also, the host of the O'Reilly Factor on Fox News. 49 weeks?
BILL O’REILLY: It’s President Obama’s favorite book, I hear. I just made that up. But, it can’t hurt, right?
ROBERTS: Sounds good. Sounds good. Let's give a report card on three fronts. Let's start with health care.
O’REILLY: Okay. Health care, I'd say D as in dog. And the reason is, we need health care. I think everybody understands in America, it's chaotic now. But, you can't be putting out a 2,000-page bill, which the Senate did, and President Obama has not been able to explain it. I mean, it's our job to watch him when he goes on TV to try to explain it.
ROBERTS: Right.
O’REILLY: Do you understand any of this? I don't.
ROBERTS: But we do know that if something is passed, Harry Truman couldn't get anything passed. President Clinton couldn't get anything passed. It will be an historic moment.
O’REILLY: That's good. But we won't understand what it is that’s historic. We’ll go, "Hey, it's historic, but I don't know what it is!"
ROBERTS: But, haven’t you- I think I heard you say it's imperfect in a lot of ways but if we do nothing that would be worse.
O’REILLY: All I want, Robin, all I'm pleading for, I want to understand the bill that's going to cost a trillion dollars and nobody can explain it! And he can't explain it. That’s why he gets a D.
ROBERTS: He gets a D for that.
O’REILLY: D for dog.
ROBERTS: How about for jobs? We’ve seen an encouraging trend.
O’REILLY: B-boy for dogs. Dogs? B-boy for jobs.
ROBERTS: Okay.
O’REILLY: Because more dogs have jobs. It's very, very encouraging that this month the unemployment rate actually went down even though it's the Christmas/Hanukkah season. We had chaos, and Obama stepped in and he did a lot of things that people criticized him for. So I think he stabilized the economy to some extent. So I'm giving him a B right now on the jobs front because it’s a tremendously difficult situation.
ROBERTS: We got such great news. Great news being 11,000 jobs lost last month. When you look at the beginning of the year, 700,000 jobs lost.
O’REILLY: That’s right. And that’s why he gets a B.
ROBERTS: And that’s why he gets a B. So, a D, a B and now Afghanistan?
O’REILLY: C. C. Took him far too long to make a decision. That helped the Taliban and it rattled Pakistan. All right? Pakistan is scared. They don't know what the USA is go to do so Pakistan isn't going to invest in their army and their blood unless they know we're growing to be in that region. So, by taking too long, he gave the Taliban encouragement and rattled Pakistan. The benefit that came out of taking too long is he sent a message to Karzai, you better clean it up as far as you can. But I have to give him a C there because I think he could have acted more decisively. And his speech at West Point was not good. He needed to get a little General Patton in there. He should have said we're going to kick some you-know-what. He didn’t do that and cadets were falling sleep. It’s never good when your army is falling asleep. That’s never good.
ROBERTS: But you were not critical as some others were about the time line. That didn’t bother you so much?
O’REILLY: The time line? What do you mean?
ROBERTS: About the time line of withdrawing troops?
O’REILLY: No, no, he has to say that to get the Europeans to cooperate. He has to say, we're not going to be there forever, but help us now. But when it comes right down to it, is Obama going to pull them out? If it's an intense in Afghanistan? He's not. He didn't do in Iraq. Look, I’m not an ideologue. I know why these guys do it and why they do it. And that’s why that didn’t bother me. All the ideologues were "Oh, yeah! Now! The Taliban is going to hide in the weeds!" That’s bull. Everybody knows if it’s not going well in that juncture, he won’t pull them out, unless it’s hopeless. So, that didn’t upset me.
ROBERTS: So, it's a bit of a mixed bag, when you look at all of the things he has on his plate. The remaining time, my friend, Diane Sawyer. You can't give her a grade. There’s no superlative well enough- good enough.
O’REILLY: Diane Sawyer? For Good Morning America all these years?
ROBERTS: Yes.
O’REILLY: Just getting up. You guys- Just getting up, you get a B-plus. Showing up at this morning at this hour, a B-plus.
DIANE SAWYER: What do we have to do to get an A from you?
O’REILLY: That's what you start with, Robin, then if you do anything intelligent in three hours, it bumps to the A. Now, some days you do, some days you don’t Particularly Cuomo. How long are you guys going to carry him? How long are you going to carry him?
ROBERTS: Sorry about that, Chris. Didn’t mean to-
CUOMO: I was excited about the B-plus.
O’REILLY: And I’m excited for Diane hosting Jimmy Kimmel. That’s what she’s doing, right? Aren’t you taking over for Kimmel?
SAWYER: Chris was just collateral damage in all of this.
ROBERTS: Mr. O’Reilly, thanks so much.
O’REILLY: Merry Christmas, everyone.
CUOMO: Merry Christmas, Bill. Coal in your stocking.
—Scott Whitlock is a news analyst for the Media Research Center.